Greek Citizens Turn to Gold

In the face of austerity measures and a possible default, Greeks are withdrawing their savings to buy gold.

There is a growing fear in Greece that the economic path the country is on is simply unsustainable and that a default is only a matter of time. This has led many in Greece to close their savings accounts and buy gold in an attempt to pre-empt any possible bank runs.

Harry Krinakis, a Greek precious metals trader noted:

"When the global financial crisis started, our sales of coins to investors overtook bullion for the first time. . .Now the sales ratio has reached five to one."

For the first three months of this year up to €2B has been withdrawn from Greek banks. This is on top of €30B being taken out of accounts last year. That represents over 12% of all the savings in Greece.

As well as moving into gold, Greeks are moving their money out of the country. A popular destination had been Cyprus. Switzerland is also a popular choice.

Even though the Greek PM George Papandreou won his confidence vote this week, there is still the small matter of the parliamentary vote on tough austerity measures next Tuesday.

The world is becoming more and more aware gold's value as a wealth-preserver. And with uncertainly around European debt and U.S. solvency likely to become more pronounced in the coming months, this trend is likely to continue.